Correlation Between I Tech and Cyber Security
Can any of the company-specific risk be diversified away by investing in both I Tech and Cyber Security at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining I Tech and Cyber Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Tech and Cyber Security 1, you can compare the effects of market volatilities on I Tech and Cyber Security and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in I Tech with a short position of Cyber Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Tech and Cyber Security.
Diversification Opportunities for I Tech and Cyber Security
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ITECH and Cyber is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding I Tech and Cyber Security 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyber Security 1 and I Tech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on I Tech are associated (or correlated) with Cyber Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyber Security 1 has no effect on the direction of I Tech i.e., I Tech and Cyber Security go up and down completely randomly.
Pair Corralation between I Tech and Cyber Security
Assuming the 90 days trading horizon I Tech is expected to generate 0.69 times more return on investment than Cyber Security. However, I Tech is 1.44 times less risky than Cyber Security. It trades about 0.03 of its potential returns per unit of risk. Cyber Security 1 is currently generating about -0.01 per unit of risk. If you would invest 5,139 in I Tech on September 24, 2024 and sell it today you would earn a total of 661.00 from holding I Tech or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
I Tech vs. Cyber Security 1
Performance |
| Timeline |
| I Tech |
| Cyber Security 1 |
I Tech and Cyber Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I Tech and Cyber Security
The main advantage of trading using opposite I Tech and Cyber Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Tech position performs unexpectedly, Cyber Security can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cyber Security will offset losses from the drop in Cyber Security's long position.| I Tech vs. BioInvent International AB | I Tech vs. Alligator Bioscience AB | I Tech vs. Moberg Pharma AB | I Tech vs. Oncopeptides AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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